When Scott Cook was trying to decide whether to take up entrepreneurship, he surveyed hundreds of people who had started their own businesses. Their advice: If he decided to do it, he should fashion himself into an industry-inverting visionary. Okay, so it didn't quite happen that way. But with Cook, who in 1983 co-founded software giant Intuit, it seems that just about every eureka moment he's had has been buttressed by rigorous testing. Such meticulousness reflects Cook's training: He spent several years as a marketer at Procter & Gamble, where "they taught us to understand the customer."
Determined that Intuit, now a US$2 billion publicly held business, would follow that principle, Cook didn't act on his original hunches until he had talked to hundreds of potential customers. That research convinced him that there was indeed a market for money-management software, provided it was streamlined and simple instead of loaded with complex features. How right was he? By 1994, Intuit was poised to merge with Microsoft, a marriage the Justice Department ultimately scuttled. "I thought it would be exciting in some ways, but I probably wouldn't be with the combined company now had that happened," Cook says. "Founders have not done well when acquired by big, centralized companies like Microsoft."
Of course, Intuit itself has become a giant company, and Cook has adjusted his role accordingly, bringing in an outside CEO in 1994. "I recognized my skill set was holding the company back," says Cook, now chairman of Intuit's executive committee. To this day, he remains a believer in the all-too-rare art of listening. "It's amazing what people will tell you," he muses. What's equally amazing is what Cook has created by hearing them.
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I would describe the start of Intuit as more of a eureka insight than a moment. The moment is really just the beginning of a journey and, in fact, only a way station on that journey. But the centerpiece of it is an insight that challenges the common wisdom. It's when you implement that you end up revolutionizing an industry.
Most of our major businesses at Intuit are based on a eureka insight. Quicken was the first of those. It really came from two separate insights at two separate times. The first was when my wife complained about doing the bills, and it was her complaining about the bills that caused me to say, "Ding! This would be a great use for the computer." I thought that because of the inherent nature of the work and the inherent set of things that computers are good at. However, that was not a unique insight. There were a lot of other people who thought computers might be good for doing personal finance. In fact, when we launched Quicken there were roughly 25 other personal-finance products on the market. So the idea of using a computer to do finances was not novel, even in the very early days.
I had always toyed with starting a business. When I was in junior high I sold Christmas cards door-to-door to earn money. And in high school I looked at going into the cuff-link business. In college, at the University of Southern California, I ended up running a club that was really more like a business. In two years I took the ski club from having no leader and being bankrupt to being the largest campus organization at the university. When I was a consultant (at Bain), I toyed with the idea of going into the widnsurfing travel business. With a buddy of mine, we ran the first-- to my knowledge-- windsurfing package tour in the U.S. It was a great success. But it was not a business that appealed to me. It looked as if it would remain a boutiquey, small, custom business.
At about the same time, though, I listened to my wife's complaints about doing the bills. So the first of the two eureka insights was "Oh, wow, this is a good use of a computer." Computers could do this job well, whereas a lot of jobs that people were alleging computers would do well, they were actually poor at doing. Storing recipes was a truly stupid use of a computer. There were a lot of really bad ideas proposed for the use of computers by people who were non-insightful. What are computers best at? Numbers and data storage. And finance is all about numbers and storage, plus there's a high degree of repetition. The bills you pay go to the same people every month, in general. So once you've typed it in, you don't have to retype it.
But having the insight that finance is a good use for a computer was not the key to success. The key was the second insight I had, which came about from surveying customers. I got the phone book, called up households, and tried to understand what they did in their finances-- their likes and their dislikes. I picked mostly upscale neighborhoods, the kinds I thought would have computers at the time, which was 1982. And the insight that came out of that was that people weren't turned on by doing graphs or other fancy stuff. They just wanted to get the work done, and they wanted to do it as quickly and easily as possible. None of the software products on the market were designed to do that. They offered a huge amount of complexity, rather than being optimized for speed and ease. There was a whole belief that the more features you had, the better. The industry paradigm was wrong for this segment, for this purpose, for what customers wanted in personal finance.
Yet the products in the market did sell. In fact, the most complex ones actually tended to sell better. This seemed incongruous; something didn't fit. So the only way I could get to the bottom of that was to actually interview customers who were using the personal-finance software products. The companies in the industry wouldn't give me their names, of course. So I wound up calling people in the computer industry to find those who had tried personal-finance software. I called computer stores and I called people at computer magazines. Sixty-five percent of those in the computer industry whom I interviewed had tried personal-finance software. And 61 percent had tried it and quit. I asked, "Why did you quit?" And the answer was "It was too slow, too hard."
So we made Quicken fast and easy...
To be continued...
Credits: This article is extracted from the little book by the Editors of Fortune called Secrets of Greatness: Advice from the World's Top CEOs and Entrepreneurs, 2006.
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